For Rahim Fazal the moment he knew he would always work for himself came when he was 15 and was fired from McDonald’s.
“If McDonald’s is not giving you a reference, you’re in pretty big trouble,” Fazal said Wednesday night at Museao at a wrap-up event for Columbia Startup Weekend that also gave insight into the world of investors.
Fazal never wanted to be fired again and co-founded a web-hosting service during high school. During senior year, in the midst of finals, he and his partners sold the business for $1.5 million. Fazal told his parents the company existed the night before the buyout ran on the cover of the Vancouver newspaper with him in front of a Mercedes wanting a color palm pilot in 2000.
Up until that point, his parents thought he was selling drugs or had a medical condition because he had missed 34 classes.
“Which was untrue,” he said in reference to the classes. “It was a bit more than that.”
Fazal’s 34-plus missed classes were really because he was taking three transfers to reboot servers for the business or to answer calls from clients in the bathroom.
“I would go into one of the stalls, it was like my own office,” he said.
Now, Fazal has moved out of the stalls and into Silicon Valley and has created three software companies—and sold two of them—before the age of 30. Fazal was named a Top 30 Entrepreneurs Under 30 in America by Inc. Magazine in 2008, and one of the Top 25 Digital Thought-Leaders by iMedia in 2009. He was also accepted into the Richard Ivey School of Business graduate program without an undergraduate degree.
He gave Columbia start up entrepreneurs insight into the unspoken rules of investors and venture capital including that buyers set the price, and the buyers are the investors.
“I feel like picking an investor is like picking your wife or your husband,” he said. ” It’s that close of a relationship. It’s probably easier to exit from your significant other.”
The main thing to remember investors aren’t interested in making entrepreneurs’ dreams come true, he said. In fact, is is a lot harder to get venture capital now, he said that stupid ideas are not getting funded anymore. They are interested in making a profit and that comes from the ratio of ownership because there is an internal model of expected return. Investors are also much more interested in someone that they know.
“It’s easier to raise money from friends and family,” he compared it to. “They are investing in you as a person, even if they have no idea what the actual business is about.”
One thing to do is meet with an investor every quarter, even before asking for money and explain the goals for the next coming quarters. Then follow up and show how those goals were met and exceeded, which will enhance credibility when asking for a check farther down the road. He told Missouri future business owners that great entrepreneurs are curious and creative. Fazal said opportunity is everywhere.
“The nice thing about being in this community is you see problems,” he said “The greatest biggest ideas are staring you right in the face.”
Fazal also said to take advantage of the community that is here and celebrate successes.
“You will do far better together than divided,” he said.
This means getting together for startup events, not bad talking anyone else’s businesses, but if they have a bad idea let them know. But each entrepreneur should remain active in the business community. He also said “Silicon Valley needs to know what’s happening in Columbia, Missiouri.”